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John Key’s state house sales policy doesn’t add up
Hon Chris Carter
Minister of Housing
14 August 2007 Media Statement
John Key’s state house sales policy doesn’t add up
National’s promise of state house sales to tenants is ringing hollow with the release of new income figures by Housing Minister Chris Carter.
National leader John Key announced a state house sales to tenants policy at the party’s recent conference. New figures obtained from Housing New Zealand reveal that the average incomes of state house tenants are insufficient to service a mortgage for the home they live in.
“National’s state house sales policy is dishonest and unworkable.
“Housing New Zealand records reveal that the average net assessable income of state house tenants is $303.75 per week, or $15,795 per year. This income is sufficient to service an affordable mortgage* of $53,000.
“With the average value of a state house in Auckland ($276,000), Wellington ($289,000) and Christchurch ($204,000) it can quickly be seen that John Key’s state house sales programme is illusory.
“In the House today National’s housing spokesperson Phil Heatley attempted to suggest the policy was only ever intended for the 9 per cent of state house tenants who pay market rents and would offer nothing for the remaining 91 per cent. Even after this ‘clarification’ the policy still has major flaws and would exclude most of state tenants.
“This includes the fact that large numbers of market renters live in provincial centres where the market rent is in fact very low because our rents are benchmarked against those in the private rental properties – hardly an indicator of tenants with spare income to pay a mortgage. If these are the houses that National is targeting for sale the policy is extraordinarily stupid, since it would take the proceeds from 2 or 3 home sales at least to generate sufficient revenue to buy a new state house in Auckland, where housing need is greatest.
“National’s policy is a flop and a sham,” concluded Mr Carter.
ENDS
* defined as repayment at 30% of income and based on the June 2007 bank interest rate weighted average of 8.2% for a term of 30 years).
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